Mega Manufacturing produces wooden chairs. The cutting department produces all o
ID: 2424097 • Letter: M
Question
Mega Manufacturing produces wooden chairs. The cutting department produces all of the component parts and transfers the parts to the assembly department. The assembly department had no work in process at the beginning of the month and had two jobs started during the month. Since materials are transferred in, all materials are charged to each job at the beginning of the job. The materials cost is $17.50 per chair. Assembly time is 20 minutes per chair and the direct labor rate is $15 per hour. Overhead is charged to a job only when a job is completed and ready to transfer to finished goods. The overhead is applied on a per-chair basis at a rate of $6 per chair. Job No. 1 was for 1,000 chairs, and it was started and completed during the month. Job No. 2 was for 1,500 chairs, and it was 60% complete at month end.
Calculate the costs to complete Job No. 1 and the unit cost per chair. Calculate the costs charged as of month's end and the equivalent units of production for Job No. 2.
Answer Sheet looks like this:
Job 1
Direct materials
$17,500
Direct labor
$5,000
Overhead applied
$6,000
Total cost
$28,500
Cost per unit (total / units)
$28.5
Job 2
Material
Labor
Overhead
Units started
Percent complete
Equivalent units
Cost per unit
Total cost
Total in WIP at month end is $
PLEASE FILL IN ANSWER SHEET!
Job 1
Direct materials
$17,500
Direct labor
$5,000
Overhead applied
$6,000
Total cost
$28,500
Cost per unit (total / units)
$28.5
Job 2
Material
Labor
Overhead
Units started
Percent complete
Equivalent units
Cost per unit
Total cost
Total in WIP at month end is $
Explanation / Answer
Job 1
Direct materials $17,500
Direct labor $5,000
Overhead applied $6,000
Total cost $28,500
Cost per unit (total / units) $28.50
Job 2 Material Labor Overhead
Units started $1,500 $1,500 0
Percent complete 100 60 0
Equivalent units $1,500 $900 0
Cost per unit $18 $5 0
Total cost $26,250 $4,500 0
Total in WIP at month end is $ 30750
Material Cost per chair 17.5 Job no 1 Job no 2
Assembly Time 20 m / chair 1000 chair 1500 chair 60 % completed
Direct labour rate 15/hr
Overhead 6/comp chair
Labour rate per unit 5
Labour rate per unit 5